2022 (7) TMI 772 - AT - Insolvency and Bankruptcy

Maintainability of appeal - time limitation - crystalline stand of the Respondent/Liquidator is that the Appellant / Applicant was not assiduous / meticulous in projecting its claims all through the Liquidation period and furnished its claims lately at the fag end of Liquidation period especially it had not filed its claim prior to 14.07.2018 - HELD THAT - In the instant case the Respondent/Liquidator had issued the paper publication inviting the claim from the Stakeholders on 18.06.2018 and the last date for submission of such claim was 14.07.2018. Admittedly the Appellant/Applicant before the Adjudicating Authority (National Company Law Tribunal) Chennai Bench had prayed for condonation of delay of 936 days in claiming the EPF and MP Act 1952 dues. The Form F filed by the Appellant s side after the beginning of the Liquidation on 20.09.2019 was not accepted by the Respondent/Liquidator. No wonder the Form G was filed by the Appellant on 02.02.2021. Aspect of delay - HELD THAT - An unpardonable lackadaisical approach / attitude of the Party in pursuing a matter before the Competent Authority/ Tribunal is not to be accepted. The Law of Limitation being harsh will affect a Litigant but it has to be pressed into service with all its vigour and rigour in the considered opinion of this Tribunal - In Law a Tribunal/ a Court of Law has no power to find out a device in granting Relief to a Party who may appeared to have been hard done by. To put is precisely an Application for condonation of delay undoubtedly create a jurisdictional fetter against consideration of tangible / substantive matter on merits. A Tribunal cannot determine the sufficiency of cause apart from the facts pleaded and made out in a given case. Just because the Appellant is a Statutory Organisation no indulgence or latitude can be shown since the Law applies to one and all in a level playing field. Appeal against Liquidator s Decision - HELD THAT - Section 42 of the I B Code 2016 enjoins that as against the decision of the Liquidator either accepting or rejecting the claims a Creditor may prefer an Appeal before the Adjudicating Authority and it cannot be gainsaid that the process of Liquidation is to be completed within the prescribed time and conclusion of proceedings in this regard is to be made within one year as enunciated under I B Code 2016. Aim of I B Code - HELD THAT - Speed is the essence of I B Code 2016. Time Wasted/Lost cannot be revisited/regained. The process of Liquidation is time bound to be completed within one year in the teeth of the I B Code 2016. Undoubtedly the Code is an inbuilt and self-contained one and the object of the I B Code 2016 is that a time barred Debt cannot be resurrected or given a fresh tenure of life as opined by this Tribunal. This Tribunal keeping in mind the present facts and circumstances of the instant case in a conspectus fashion and also considering the submissions of the Appellant side and the stand taken on behalf of the Respondent/Liquidator comes to a consequent conclusion that the view arrived at by the Adjudicating Authority (National Company Law Tribunal) Division Bench Court I in dismissing the IA/442/CHE/2021 (in condoning the delay of 936 days in claiming the EPF MP Act dues) in TCP/413/IB/CB/2017 through its impugned order dated 17.12.2021 is free from legal infirmities. Resultantly the Appeal fails. Appeal dismissed.

Summary

Issues Involved:
1. Delay in filing the appeal.
2. Dismissal of the Interlocutory Application (IA) by the Adjudicating Authority.
3. Appellant's claim for Provident Fund dues during the liquidation process.
4. Legal arguments and precedents cited by the Appellant.
5. Liquidator's response to the Appellant's claims.
6. Tribunal's analysis and decision on the delay and merits of the case.

Issue-wise Detailed Analysis:

1. Delay in Filing the Appeal:
The Appellant filed I.A. No. 415 of 2022 to condone a delay of 116 days in filing the Company Appeal. The Learned Counsel for the Appellant argued that the appeal was within the limitation period as extended by the Hon'ble Supreme Court in M.A. No. 21 of 2022 in M.A. No. 665 of 2021 in SMW (C) No. 3 of 2020, which excluded the period from 15.03.2020 to 28.02.2022 for the purposes of limitation. The Tribunal, considering the substantial cause of justice, allowed the condonation of delay application.

2. Dismissal of the Interlocutory Application (IA) by the Adjudicating Authority:
The Appellant challenged the dismissal of IA/442/CHE/2021 by the Adjudicating Authority (NCLT), which was filed for condoning a delay of 936 days in claiming EPF dues. The Adjudicating Authority observed that the Appellant was not diligent in filing their claims during the liquidation period and dismissed the IA based on the significant delay and lack of satisfactory explanation.

3. Appellant's Claim for Provident Fund Dues During the Liquidation Process:
The Appellant, representing the Regional Provident Fund Commissioner, claimed that the Corporate Debtor failed to remit the Employees' Provident Fund contributions for specific periods. Despite multiple communications and reminders to the Respondent (Liquidator), the Appellant's claims were not addressed. The Appellant contended that the dues should be paid in priority over other claims as they are outside the liquidation estate, citing various legal precedents.

4. Legal Arguments and Precedents Cited by the Appellant:
The Appellant cited several judgments to support their claim that EPF dues are a first charge on the assets of the establishment and should be prioritized over other debts. Notable references included:
- Employees Provident Fund Commissioner V O.L. of Esskay Pharmaceuticals Limited, where the Supreme Court held that EPF dues have a first charge on the assets.
- Company Appeal (AT) (INS.) No. 354 of 2019, where the Tribunal directed the release of full provident fund and interest, stating that provident fund dues are not assets of the Corporate Debtor.
- Precision Fasteners Limited V Employees Provident Fund Organisation, which emphasized that provident fund dues are excluded from the liquidation estate.

5. Liquidator's Response to the Appellant's Claims:
The Liquidator argued that the Appellant was not diligent in filing their claims within the stipulated time and that the claims were filed belatedly after the liquidation commencement date. The Liquidator also raised concerns about potential collusion between the employees and the Provident Fund Department in generating challans after the liquidation commencement date. The Liquidator maintained that the claims were not binding due to the lack of authorization and the belated filing.

6. Tribunal's Analysis and Decision on the Delay and Merits of the Case:
The Tribunal emphasized that the length of the delay is immaterial, but the acceptability of the explanation for the delay is crucial. The Tribunal found that the Appellant failed to provide a satisfactory explanation for the significant delay in filing the claims. The Tribunal noted that the process of liquidation is time-bound and that the Appellant's lackadaisical approach could not be condoned. The Tribunal upheld the Adjudicating Authority's decision, stating that the dismissal of the IA for condoning the delay was free from legal infirmities.

Conclusion:
The Tribunal dismissed the Company Appeal (AT) (CH) (INS) No. 182 of 2022, upholding the Adjudicating Authority's decision to dismiss the IA/442/CHE/2021 due to the insurmountable delay in claiming EPF dues. The IA No. 413 of 2022 (For Urgent Listing) and IA No. 414 of 2022 (For Stay) filed by the Appellant were also closed.